Regional Headquarters RHQ

Regional Headquarters (RHQ) in Saudi Arabia

The Regional Headquarters (RHQ) Programme in Saudi Arabia (KSA) has seen an increase in numbers since its initial introduction in 2021. The Kingdom has seen over 400 multinational organisations set up their RHQs in Saudi Arabia in the last 3 years.

The RHQ programme is an initiative shared by the Royal Commission for Riyadh City (RCRC) and the Ministry of Investment (MISA)/ SAGIA to position KSA as the regional hub in the Middle East and North Africa (MENA) region for Multinational Companies (MNC) as part of Kingdom's Vision 2030 initiatives to drive economic growth.

What is an RHQ?

The RHQ Programme in is an initiative by the Ministry of Investment (MISA) in Saudi Arabia which seeks to attract large multinational organisations to establish their headquarters for the region within the Kingdom.

An RHQ in Saudi Arabia is an entity of a multinational organisation that has been established under the RHQ laws in Saudi Arabia. The purpose of a Saudi RHQ is to assist manage and support its operating MENA region branches, subsidiaries and affiliates.

The RHQ law specifies that as of 1 January 2024, subject to certain conditions, only multinational businesses incorporated in Saudi Arabia with a RHQ will be able to tender for Government contracts and projects.

What is the purpose of the RHQ in Saudi Arabia?

The RHQ is its own separate legal entity in Saudi Arabia

The RHQ will require a physical office space

The RHQ will be the center for the regional administrative authorities

Leads strategic direction for MENA region - must be directed and managed in KSA with board meetings held in country

The RHQ is not intended to carry out any business acitivities that generate income

Commercial activities that generate income must be carried out by the affiliate operational entity which is separate to the RHQ. This separate license will be issued by MISA (activity dependent).

Activities of an RHQ

There are a number of mandatory and optional RHQ business activities. Below is a sample of the RHQ business activities. For a full list of required and optional activities enquire with us.

Mandatory: (all required)

Formulate and monitor regional strategy
Coordinate strategic alignment
Embed products and or services in the region
Support acquisitions, mergers and divestments
Financial performance reviews & reporting
Plans for business and marketing
Business coordination
Others

Optional: (all 3 required)

Sales & Marketing Support
Training Services
Human Resources
Accounting
Legal
Auditing
Research Analysis
Compliance and Internal Control
Others

Entities requiring RHQ

When would a company or multinational organisation be required to set up a RHQ in Saudi?

When the company has at least two other branches/ subsidiaries in two different countries within the MENA region (i.e. United Arab Emirates and Qatar), they would qualify or be applicable to the RHQ requirement.

Entities also requiring an RHQ include ministries, government agencies, authorities, interests, public institutions, and independent agencies with a public moral personality in KSA.

Benefits of setting up an RHQ in KSA

The RHQ programme has created additional compelling incentives to draw more companies headquarters to the Kingdom:

Exemption from Saudization for the first 10 years
Waiver of professional accreditations
Ability to apply for Government tenders/contracts
No visa limitations
Accelerated visa issuance
30 year Tax incentives - 0% Corporate Tax (CT) & 0% withholding tax (WHT) (provided conditions are met)

How can PPG assist?

Sovereign PPG has successfully set up regional headquarters for our clients in KSA. We understand the nuances and specifics required to obtain the RHQ license. We can provide guidance and support with all administrative processes with setting up an RHQ in Saudi Arabia.

An initial call with our Saudi based consultants will help you to understand your eligibility and requirements for a RHQ in KSA. We can then guide you through the steps and documents requirements for initial set up and continued RHQ maintenance.